Top Reasons for Home & Auto Increases

Top Reasons for Home & Auto Increases

It’s crucial to realize that there are many factors that contribute to home and auto increases. Whether you’re purchasing a new policy or renewing an existing one, understanding these factors will help give insight on how your rates are calculated.

Home

1. Modern Homes and real estate prices
Homes with high-end features such as pools and hot tubs drive up preplacement costs and liability claims.

2. Finished basements with electronics
Finished basements cost more to repair if there’s sewer backup or other damage due to higher-priced building material. Also, it’s more likely for a finished basements to contain expensive valuables like electronics and furniture. 

3. Eco-friendly, but not budget-friendly
Environmentally friendly features like solar panels, energy efficient windows and doors, and high-efficiency appliances are more expensive to repair or replace.

4. Aging municipal infrastructure
Outdated municipal infrastructure and a higher demand for water make sewer backups more frequent, resulting in more damage-related claims.

5. Your claims history changed
If you’ve recently made a claim, this could cause you to lose out on the claims-free status discount. Making multiple claims could also lead to a surcharge on your premium.

6. Neighbourhood trends put you at a greater risk
When neighbourhoods grow, it alters demographics and risks. An example could be a new bar opening nearby which has increased the potential for crime. Insurers consider these factors when assessing risk. 

7. Extreme weather events and catastrophes are more frequent
Forest fires, floods, storms, and other events are becoming more frequent and cause expensive damages, resulting in more claims and rising insurance costs. 

8. Emergency services, skilled trades, and personal belongings are more expensive
As with any goods or services, inflation means higher prices for things like emergency services and labour costs for repairs. That means paying for claims is more expensive, too. 

Auto

1. Windshields now have built-in technology
New advanced driver assistance systems make windshields more expensive to replace. Recalibrating a car’s computer system following a windshield replacement also adds to labour costs.

2. Front and rear bumper sensors are pricey
Even a tiny fender bender can require a bumper replacement. Many repairs also require a vehicle’s computer system to be recalibrated for the sensors to work. Those extra labour costs can really add up.

3. Fancy autonomous features
Newer vehicles can now include a whole range of features like adaptive cruise control and park assist. With that comes with a complex computer system and sensors that could cost more to repair.

4. At-fault collisions, traffic tickets or violations, and licence suspensions
Factors such as being involved in an at-fault collision, receiving traffic tickets or violations and having your license suspended can cause you to be a higher risk to insure which often results in higher premiums. 

5. Fraudulent claims
Fraudsters who stage accidents to make money are affecting the entire industry. In Ontario alone, the Insurance Bureau of Canada reports that car insurance fraud costs drivers an estimated $1.6 billion each year (or about $236 per driver). Rates increase to cover those costs.

6. Distracted driving
Distracted driving (such as texting, changing the radio station, eating, etc.) now outpaces drunk driving as a leading cause of accidents and deaths on roads. In addition, the damage that occurs in distracted driving related accidents tend to be more severe which can cause premiums to increase.

7. Medical services are more expensive
It’s not just physical repairs that can cause premiums to rise. If you’re injured in an accident, you might need medical services like physiotherapy to recover. And like everything else today, these services cost more every year.

8. Trends that show your area as a higher risk for collisions, theft, or other incidents 
You premiums could increase if analytics show that your area has become more prone to risks (like extra traffic congestion or extreme weather events that lead to collisions, for example).

Source: Economical

 

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